Correlation Between BNP Paribas and Hortico SA
Can any of the company-specific risk be diversified away by investing in both BNP Paribas and Hortico SA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BNP Paribas and Hortico SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNP Paribas Bank and Hortico SA, you can compare the effects of market volatilities on BNP Paribas and Hortico SA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BNP Paribas with a short position of Hortico SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNP Paribas and Hortico SA.
Diversification Opportunities for BNP Paribas and Hortico SA
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BNP and Hortico is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BNP Paribas Bank and Hortico SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hortico SA and BNP Paribas is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BNP Paribas Bank are associated (or correlated) with Hortico SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hortico SA has no effect on the direction of BNP Paribas i.e., BNP Paribas and Hortico SA go up and down completely randomly.
Pair Corralation between BNP Paribas and Hortico SA
Assuming the 90 days trading horizon BNP Paribas is expected to generate 1.11 times less return on investment than Hortico SA. But when comparing it to its historical volatility, BNP Paribas Bank is 1.01 times less risky than Hortico SA. It trades about 0.05 of its potential returns per unit of risk. Hortico SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 418.00 in Hortico SA on September 3, 2024 and sell it today you would earn a total of 227.00 from holding Hortico SA or generate 54.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.32% |
| Values | Daily Returns |
BNP Paribas Bank vs. Hortico SA
Performance |
| Timeline |
| BNP Paribas Bank |
| Hortico SA |
BNP Paribas and Hortico SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNP Paribas and Hortico SA
The main advantage of trading using opposite BNP Paribas and Hortico SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNP Paribas position performs unexpectedly, Hortico SA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hortico SA will offset losses from the drop in Hortico SA's long position.| BNP Paribas vs. UniCredit SpA | BNP Paribas vs. Santander Bank Polska | BNP Paribas vs. Bank Polska Kasa | BNP Paribas vs. Bank Handlowy w |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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